Howard rebukes Telstra for ‘blackmail’

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The furore over regulation of Telstra deepened on Friday when John Howard, Australia’s prime minister, rebuked the Australian telecommunications group’s chief executive and said the government would not be blackmailed into changing its position.

Mr Howard, who has long campaigned to privatise the telecoms group, also said he was “very concerned” about its share price.

Sol Trujillo, Telstra’s chief executive, has used an imminent deadline for the company’s A$24bn (US$17.8bn) privatisation to ratchet up pressure on the authorities to give in to his demands on regulation.

In a speech on Thursday, Mr Trujillo threatened to axe plans to build a high-speed fibre network, and lambasted Australia’s “mindless” regulatory regime.

Responding on Friday, Mr Howard said: “One thing I don’t do is succumb to blackmail . . . I’d simply say to Mr Trujillo and the board of Telstra, we have made our position regarding regulation in telecommunications very clear, and we’re not going to be persuaded to change it.

“I suggest they continue their discussions with the [competition authority] because bluster about changing the regulations is not going to achieve anything.”

Telstra has been locked for months in difficult talks over the pricing and access to the planned fibre network by its rivals. The impasse is the last big obstacle to the sale of the state’s remaining 51.8 per cent stake in the carrier.

Telstra’s shares have been among the Australian market’s worst performing in the past year and are trading at about half their value at the group’s secondary offering in 1999.

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